[condor]

Looking for a GST expert, preferably in Bangalore.

Friend has some queries, related to transportation industry/services.

[sasi@8689]

Originally Posted by carboy

Thank you. It seems that FIRC (Foreign Inward Remittance Certificate) will be required for claiming Input credit. But he is not going to claim any input credit so it doesn't matter to him. But do you know if FIRC also be required for filing the GST returns itself.

FIRC's are not required for filing of returns. Only the invoicing details are required to be submitted in the return and not the particulars of receipt of payments, so no requirement of FIRC's

Originally Posted by carboy

The case here is that payment is being done through an intermediary bank. The contract is with a foreign company in Rupees rather in Foreign Currency (this was done to avoid uncertainties of rate fluctuation)..................So the receiver cannot get a FIRC from his bank.............

Is this payment mechanism on par with how we make international payments, say in USD? As in, we purchase the required amount of USD from our banker by paying the corresponding amount of INR and the banker then remits the USD amount to the payee? If yes, you might have an issue because of the below

- IGST is payable on interstate supplies
- Supply where the supplier is located in India and the place of supply is outside India has been defined as an interstate supply
- Place of supply is generally the location of the recipient of such supply except for few cases specified
- For a supply to be eligible for classification as export (which is zero rated), a set of conditions have been laid down one of which is realisation of payment in convertible foreign exchange

Given the above scenario, it seems to me that if there is a supply from India whose recipient is outside India, consideration for which is not received in convertible forex, such supply would not be eligible to be treated as an export (which carries zero rate of tax) but would still continue to be an interstate supply which attracts IGST. In simpler terms, IGST at the applicable rate might be applicable on the value of such services which shall be an additional cost in your case

Please note that this being a new legislation, I am yet to comprehend the finer details, but my initial reading of the law suggests the above

Originally Posted by carboy

This has never created a problem in the service tax regime. Because he never had service tax registration. And the only thing he used to file was Income Tax returns (unaudited).

It was different under service tax regime. Charging section of service tax covers only the services provided in the 'taxable territory'. Place of performance rules being similar to that of the GST scenario mentioned above, if the recipient of service is located outside India, even if the consideration was not received in convertible forex (making the service not eligible to be an export), tax cannot be charged on the output value. Maximum cost would be the denial of input credit pertaining to such output services which would have been otherwise available as refund / for set-off (if there is another output liability).

This position seems to have been altered in GST scenario by including all the supplies with place of supply outside India under inter-state trade

[carboy]

Originally Posted by sasi@8689

Is this payment mechanism on par with how we make international payments, say in USD?

Banks offer 2 ways of remitting to other countries.
Let's say someone in Europe wants to remit money to someone in India. Their European bank offers them 2 ways.

1) If their contract with the Indian vendor/supplier is in dollars or some forex, then they can tell the bank send the vendor 100$. In this case, the conversion is done at the Indian bank. The Indian bank subtracts the conversion fees, the conversion tax & then remits the money in the vendors account in rupees (if the vendors account is a regular rupee account). So if the contract is for 100$ per unit of service, the vendor may receive different amount of rupees each time based on the exchange rate. This is cheaper for the remitter in terms of the charge his bank levies on him.

2) If the contract with the Indian vendor/supplier is in rupees, then they cannot opt for the 1st option because then they do not know how much $ dollars to transfer because the rates are variable even if they account for the taxes & conversion fees at the receiver's end. So they tell their bank I want to remit 10,000 Rs. Their bank has a tie up with some Indian intermediary bank. They tell the intermediary bank to remit 10,000 Rs to the vendor, the intermediary bank does that and then reconciles it with the European bank. This is more expensive for the remitter in terms of charges. Even in this case, there is forex coming in from Europe to India - however, the vendor cannot get a certificate from his bank because his bank never saw the forex. He cannot get it from the intermediary bank either because he is not their customer - they did not have any direct dealings with him. All his has in this case to prove he got money from abroad is his contract & he can probably get the transfer advice from his client abroad.

Originally Posted by sasi@8689

For a supply to be eligible for classification as export (which is zero rated), a set of conditions have been laid down one of which is realisation of payment in convertible foreign exchange

Is this really true?


https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=7454&kw=CONSIDERATION-RECEIVED-IN-INR-FOR-EXPORT-OF-SERVICE-UNDER-GST-REGIME

From this "The tribunal has held, in this case, that the amount received in INR from a foreign bank fulfils the condition regarding the receipt in foreign exchange."

However, I think proof that it came from a foreign bank is the question here - is contract and transfer advise enough as proof?

[sasi@8689]

Originally Posted by carboy

Banks offer 2 ways of remitting to other countries.
....................................

I am clear on this part; it basically boils down to who is bearing the conversion costs

Originally Posted by carboy

Is this really true?

https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=7454&kw=CONSIDERATION-RECEIVED-IN-INR-FOR-EXPORT-OF-SERVICE-UNDER-GST-REGIME

Thanks, made an interesting read and led to a small research on the topic. Circulars referred to in the quoted case law have been superceded now by the RBI's Master Direction – Export of Goods and Services dated Jan 01, 2016 read with Notification No. FEMA 14(R)/2016-RB. These are largely similar to the earlier notifications and as per clause 3(B) of the said notification, 'a receipt in rupees from the account of a bank situated in any country other than a member country of the Asian Clearing Union' shall be treated as receipt in convertible foreign currency in relation to export of services. So, yes, your understanding seems to be correct

On the FIRC, I was given to understand that he would still be able to get it in this case. May be, he can take it up with some senior personnel at his bank. Anyways, it is only a procedural requirement which shall not alter merits of the case, if it exactly fits in the RBI circular and master directions said above

Lastly, though you must be aware of this - the very fact that this matter had to reach CESTAT to get some relief shows that the regular enforcement / audit officers of the Department wouldn't accept this stand. I doubt if any relief can be expected at the level of Commissioner also unless it is a Jurisdictional tribunal that we are referring to. So, we are looking at potential and prolonged litigation which requires payment of tax before filing the appeal (unless stay is granted) and which would take few years to be bought to a closure. So, better to have professional assistance on board now itself who would handle the registration and monthly compliances along with the litigation work in future, if it arises. Also, if possible, the option of getting the contract amended to receive payment in foreign currency directly shall be very helpful. Even the customer shall be happy with that as he would save on conversion costs.

[carboy]

I really don't know what to make of this. Everyone has a different opinion. Good & Simple Tax doesn't seem simple at all!


http://www.ndtv.com/india-news/gst-f...pplies-1717831


If someone trades on zero per cent GST items (grains, pulses etc.), is it necessary to register for GST, if the turnover exceeds Rs.20 lakh?

A person dealing with 100 per cent exempted supply is not liable to register irrespective of turnover.

Is it correct that a person dealing exclusively in NIL rated or exempt goods/services is liable to register if the turnover exceeds Rs. 20 lakh or Rs. 10 lakh in some states?

There is no liability of registration if the person is dealing with 100 per cent exempt supplies.

[akshaymahajan]

Noob GST query

Transported a bike from BLR to Delhi (nightmare coming up on the correct thread)

The transporter has given a hand written bill with 18% GST included but the bill has only a Service Tax number

Also, the tax is applied on total bill (including the insurance and docket charge whatever that is).

Is this legal? The transporter has been a pain, and if this bill is in any way illegal, I will take him to court and get the excise department involved.

Location: Bangalore

Thanks

[akshaymahajan]

Reposting as I need urgent advice

Transported a bike from BLR to Delhi (nightmare coming up on the correct thread). I still have not recieved it and trying to save Rs 1500 turns out to be a bad bad decision.

Coming to the issues,

1. The transporter has drfted a hand written bill with 18% GST included but the bill has only a Service Tax number. I just have a Whatsapp image of the same. Also, I thought GST on transport was 5%. Is that not true? And is charging GST like thi legal? If it is incorrect, I want to take it up with the CBEC. How do I go about this?

2. The bike was supposed to reach in a week and its been two weeks already. The courier guy says that he will hand it in 24 hours after the payment is made. I am in no mood to pay without seeing the bike in person.

3. While collecting the bike, the guy had mentioned 3500 as delivery charges. This is over SMS. Now he has sent a final bill for 5800. SInce he has the bike, not sure what to do here.

4. What is my legal recourse here? Can I file a case of harrasment, extortion and possibly theft here?

I regret not having seen the online ratings of this company before shipping the motorcycle.

Thanks

[IndigoXLGrandDi]

Is it true that we cannot take Set-Off of VAT/Service Tax/GST on Spare Parts/Service Carried out on vehicle?

Our Accountant told me that as CAR is A Luxury Item and it is registered on my Father's Name it is not possible to take Set-Off of VAT/GST charged in Tax Invoice of Spare Parts purchased.

But my Father's opinion is that we can claim VAT/GST Set-Off on the Spares purchased.

[bharatbits]

Any lawyer on the forum with experience in fighting cases against the Medical Council of India or Directorate General of Health Services or Ministry of Health and Family Welfare or Health, Medical and Family Welfare Department?

[Sherlocked]

Originally Posted by bharatbits

Any lawyer on the forum with experience in fighting cases against the Medical Council of India or Directorate General of Health Services or Ministry of Health and Family Welfare or Health, Medical and Family Welfare Department?

Neither I'm a lawyer nor related to medical field, but just curious about your concern. Is it regarding 3rd round of Counselling to be conducted for NEET SS?

[bharatbits]

Yes it is regarding the 3rd round counselling. Nice to see people outside the medical field also having awareness about it.

[FrozeninTime]

Originally Posted by bharatbits

Yes it is regarding the 3rd round counselling. Nice to see people outside the medical field also having awareness about it.

May I know what is the issue? Is it regarding bond or fees charged by Private colleges.

[Sherlocked]

Originally Posted by bharatbits

Yes it is regarding the 3rd round counselling. Nice to see people outside the medical field also having awareness about it.

Somebody I know was also planning to file a case but now he has decided it's better to study for next year exam than fight for very few good DM seats.

Originally Posted by FrozeninTime

May I know what is the issue? Is it regarding bond or fees charged by Private colleges.

It's regarding the third round of Counselling for NEET SS 2017 exam. The first round was done in haste with very few seats. In the second round only they brought all the seats. Hence it will be fair to have a third round because of non joining by many.

I hope medico students fight for the bond issue too. Feels bad for someone who has already given 9 to 10 years of his career is now being forced to sign a bond ranging from 3 to 10 years to do his super speciality.

[mjumrani]

Originally Posted by akshaymahajan

Reposting as I need urgent advice

Transported a bike from BLR to Delhi (nightmare coming up on the correct thread). I still have not recieved it and trying to save Rs 1500 turns out to be a bad bad decision.

Coming to the issues,

1. The transporter has drfted a hand written bill with 18% GST included but the bill has only a Service Tax number. I just have a Whatsapp image of the same. Also, I thought GST on transport was 5%. Is that not true? And is charging GST like thi legal? If it is incorrect, I want to take it up with the CBEC. How do I go about this?

2. The bike was supposed to reach in a week and its been two weeks already. The courier guy says that he will hand it in 24 hours after the payment is made. I am in no mood to pay without seeing the bike in person.

3. While collecting the bike, the guy had mentioned 3500 as delivery charges. This is over SMS. Now he has sent a final bill for 5800. SInce he has the bike, not sure what to do here.

4. What is my legal recourse here? Can I file a case of harrasment, extortion and possibly theft here?

I regret not having seen the online ratings of this company before shipping the motorcycle.

Thanks

GST is 18% and not 5%. A GST bill without GST number is illegal. You can contact GST helpdesk to file a complaint, the number is 0120-4888999.

[akshaymahajan]

Originally Posted by mjumrani

GST is 18% and not 5%. A GST bill without GST number is illegal. You can contact GST helpdesk to file a complaint, the number is 0120-4888999.

Thank You.

I did file a complaint on the pgportal. Will file one with the GST dept as well.

The 5 vs 18% is still confusing to a layman like me. I was relying on this piece I read.

Services provided by Goods Transport Agency or GTA are divided into 2 categories and both are taxed at 5%.

Services of goods transport agency (GTA) in relation to transportation of goods [other than used household goods for personal use] - Taxed at 5% without ITC (Input Tax credit)
Services of goods transport agency in relation to transportation of used household goods for personal use. - Taxed at 5% without ITC (Input Tax credit)